On January 17, the Centers for Medicare & Medicaid Services (CMS) released the list of the next 15 Part D drugs that have been selected for Medicare negotiation for Initial Price Applicability Year (IPAY) 2027. This list follows the first 10 selected drugs for IPAY 2026.

While MFPs will apply specifically to the 25 selected drugs, they may also impact the competitive dynamics between these drugs and their therapeutic alternatives. With more drugs now being selected, Medicare Part D plans may increasingly change formulary strategies based on MFPs, potentially impacting beneficiaries’ access to both selected drugs and their therapeutic alternatives.

To assess the potential number of Medicare beneficiaries who may see impacts of MFPs in the market, Avalere identified therapeutic alternatives of the 25 selected drugs for IPAYs 2026 and 2027. Using the most recent CMS dashboard data, Avalere then estimated the number of beneficiaries by therapeutic area that used one of the 25 selected drugs or a therapeutic alternative in 2022 (Table 1).

Table 1. Estimated Number of Medicare Beneficiaries that Used a Product Selected for Negotiation (IPAY 2026 and 2027) or a Therapeutic Alternative, by Therapeutic Area, 2022

*Estimated Part B beneficiaries includes fee-for-service (FFS) beneficiaries from the CMS Part B dashboard and estimated Medicare Advantage (MA) enrollees based on the relative enrollment in FFS vs. MA. If individual drugs were selected products or therapeutic alternatives to selected products for both 2026 and 2027, beneficiary counts for the drugs were only counted once. However, the number of beneficiaries reported does not represent a unique count of enrollees, as beneficiaries may take multiple products within and across therapeutic areas.

Methodology

For IPAY 2026 drugs, Avalere used the therapeutic alternatives identified for each selected drug in CMS’s MFP justifications. For IPAY 2027 drugs, Avalere used internal clinical expertise to identify therapeutic alternative products. For both IPAYs 2026 and 2027 therapeutic alternatives, Avalere only assessed branded products, as these products are most likely to be directly impacted by MFPs. Avalere then used the 2022 CMS Part D and Part B spending dashboards (the most recent year of available data) to identify the number of beneficiaries taking each identified selected drug and therapeutic alternative. Because the Part B dashboard only includes spending and utilization from FFS Medicare, Avalere applied a ratio based on MA vs. FFS enrollment in 2022 to estimate the number of enrollees taking a selected drug or a therapeutic alternative.

A Trusted Partner for IRA Negotiation

The IRA will continue to have wide-reaching impacts across the prescription drug market. With expertise in policy, evidence strategy, and market access, Avalere’s multidisciplinary team can help patient advocates, plans, and manufacturers understand the nuance and complexities of Medicare negotiation for 2027 and beyond. Connect with us to learn more.